Nexstar Media Group Maintains High Dividend Amid Media Landscape Shifts

Nexstar Media Group (NASDAQ: NXST) has reaffirmed its commitment to shareholders by maintaining its quarterly dividend at $1.86 per share, payable on June 2, 2025, to holders of record as of May 19, 2025. This decision underscores the company’s financial stability, even as it navigates industry-wide challenges in transitioning to digital platforms. The dividend, which carries an annualized yield of 4.9%, reflects a 37.5% increase from its 2023 starting point and aligns with Nexstar’s decade-long streak of dividend growth.

Dividend History: A Decade of Growth

Nexstar’s dividend trajectory has been nothing short of remarkable. Since February 2023, when it increased its payout by 50% to $1.35 per share, the company has steadily raised its dividend. By late 2024, it reached $1.69, and in early 2025, it climbed further to $1.86—a +10.1% jump from the prior quarter. This growth has been fueled by Nexstar’s 35.86% payout ratio, which analysts note is sustainable, as dividends consume less than 40% of its earnings.

Financial Health: Stability Amid Industry Shifts

Nexstar’s dividend sustainability is backed by its diversified media portfolio. The company owns 201 television stations across 116 markets, reaching 220 million people, and holds stakes in national networks like The CW and NewsNation. Its digital assets, including The Hill and NewsNationNow.com, rank among the top 10 U.S. digital news platforms, generating over 316,000 hours of programming annually.

Recent financials highlight resilience:
- Q4 2024 revenue and adjusted EBITDA exceeded Wall Street expectations.
- Operating losses at The CW dropped to $7 million in Q4 2024, down from $126 million annually in prior years.
- Nexstar reduced debt by $327 million in 2024, lowering its net leverage to 2.91x.

Analyst Views: Optimism vs. Caution

Analysts are divided but cautiously optimistic. Benchmark analyst Daniel Kurnos upgraded Nexstar’s rating to Buy with a $225 price target, citing its “unexpected distribution growth guidance” and competitive positioning. Meanwhile, Citi analysts maintained a Neutral rating, citing fair valuation at $186.

However, Grizzly Research initiated a short position, warning of declining digital engagement at key assets like The CW and BestReviews.com, which could strain cash flows. This highlights a critical risk: Nexstar’s ability to adapt to a “digital-first” media landscape remains unproven.

Risks and Considerations

• Digital Transition: Falling web traffic and app usage at digital properties could erode revenue.
• Strategic Moves: Apollo Global Management’s potential sale of Cox Media Group has positioned Nexstar as a buyer, which could reshape its financial strategy.
• Dividend Volatility: Future payments depend on quarterly Board approval, introducing uncertainty.

Investment Takeaways

For income-focused investors, Nexstar’s 4.9% dividend yield and 13-year dividend-paying streak are compelling. However, the stock’s volatility—8.17% over the past 30 days—requires caution. Short-term traders might find value in the May 2025 forecast, which predicts a price range of $149.43–$155.48, with a potential 4.17% short ROI.

Conclusion

Nexstar Media Group’s dividend decision reflects its financial discipline and confidence in cash flows. With a low payout ratio, robust EBITDA guidance ($1.5–$1.595 billion for 2025), and a diversified media ecosystem, the company is well-positioned to sustain payouts. However, investors must weigh this against risks like digital engagement declines and strategic bets like a potential Cox Media Group acquisition.

For long-term holders, Nexstar offers steady income and growth potential in a fragmented media sector. Short-term traders might capitalize on May’s dip, but all investors should monitor Q1 2025 earnings (reporting May 8) and digital performance metrics closely. As Nexstar navigates its next chapter, its dividend remains a beacon of stability in an evolving industry.

Nexstar Media Group (NXST) data as of May 5, 2025. Past performance does not guarantee future results.